By Barbara Haga, March 15, 2017

This month I am continuing the discussion regarding whether performance recognition is a productive part of the performance management process.

Grievances and Reconsideration Requests

For some agencies, it seems that the design of appraisal systems, including in some cases the tying of awards to appraisals, is all about avoiding grievances.  It’s not whether it’s a good program, or accomplishes the goals of performance management, or meets the need for feedback, it’s whether all of the guesswork has been eliminated so that the appraisals can be defended if there are challenges.  Grievances and requests for reconsideration can be a huge drain on agency resources, so trying to avoid them is a reasonable response.

Grievances can run the gamut, from a challenge to one employee’s summary rating to an institutional grievance filed by the union about the entire rating system.  Depending on what your appraisal program and/or grievance system allows, there could be a grievance about an individual element rating in an employee’s appraisal, even though it wouldn’t change the overall rating.  Unless the matter is excluded, comments written in an appraisal may also be grievable.  Add in pay-for-performance and the ante goes way up and is likely to increase the number of grievances, because now paychecks and ultimately annuities are at issue.  If you tie awards directly to the level of appraisal (i.e., everyone rated Level 4 or 5 gets an award but not those rated Level 3), then you are likely to generate grievances because employees want a share of the pie.  The number of places where something could go wrong is mind-boggling.

An Illegal Appraisal System

Let’s take a look at a grievance about appraisals that had far reaching and also costly impact.  You can read about it at and  The Securities and Exchange Commission (SEC) implemented a pay-for-performance system in 2003.  The system had 15 pay levels, with up to 31 steps in each level.  An employee with an Outstanding rating could move up three steps in a year, resulting in a 4.5% salary hike.  In impasse negotiations, the Federal Service Impasses Panel allowed SEC to implement because the Panel found that the system “reflects a pay structure that was well-researched, based on best practices from other agencies, meets the agency’s needs, and is comparable to those of other financial regulatory agencies.”  So, how did this well-designed system fall apart?  Apparently, the performance requirements were not specific to the jobs that employees performed.  According to NTEU, who represented the effected employees, the measures of performance were not specific to the jobs performed by the employees and thus employees had little way to know what the supervisors or the review board that gave the increases was looking for.

That was just part of the problem.  The union pointed out that these not-so-clear performance requirements had an adverse impact on African-American employees and employees 40 or older, who were statistically rated lower than their counterparts.  The matter was taken to arbitration.  Apparently, the agency was not able to substantiate that the ratings were legitimate, and the arbitrator ruled in 2007 that the system was illegal because it was discriminatory.  The end result was an award of $2.7 million that was to be divided among the African-American employees and older workers who were affected by the discrimination.

In addition to the settlement to correct the past discrimination, the SEC and NTEU came to an agreement about new performance criteria that they designed together.  The new system was based on private sector benchmarks, a review of each job to determine the measures that fit each one, and training for managers.  [Note:  I thought the content of performance appraisals was not subject to negotiation, but then I get confused some times.  It happens when you are old enough to remember what the huge issues were when the Civil Service Reform Act of 1978 was initially implemented.  See National Treasury Employees Union and Department of the Treasury, Bureau of the Public Debt, 3 FLRA No. 119 (1980) for starters.]

Anyway, negotiable or not, the agency and the union agreed on specific performance measures.  I am reading that to mean that the measures took out some of the subjectivity and replaced it with more objective measures.  It’s common that unions want that.  They generally like to see a system that limits the amount of discretion that the manager has – and objective measures do that.

Creating Measures that Remove Subjectivity

My union friends are probably not going to like this part of the column.  (And, yes, I do have some union friends).  While I understand what their interests are, I am concerned about what I consider a watering down of performance measures.  In organizations where unions tried to limit the judgment being applied and the discretion that the supervisor had to assess the work and replaced that with more “objective” measures (like SMART measures), the agency gave up assessing the higher level skills.

What does that look like?  Instead of measuring by things like “applies appropriate techniques within accepted guidelines in dealing with complex situations, employs technical knowledge and strong skills in persuasion to convince recipients of reviews/audits of the need for changes to obtain their commitment to make changes, or applies judgment in interpreting guidelines and advances reasonable alternatives to meet goals of the program” the measures become more like “completes 90% of audits on time and without the need for significant technical changes.  Three or fewer minor errors in an audit report are considered acceptable.  Any delays in meeting assigned deadlines must be approved in advance by the supervisor.”

Why would an organization want to measure by objective standards?  It makes it easier to defend the ratings, as apparently the SEC was unable to do.  And, when the awards are linked to the rating level without any independent recommendation whether an award is warranted, then more grief of explaining why one received an award and another didn’t is eliminated.  But, do awards in such systems really motivate people to do more and do better?  I don’t think so.  What I have seen is that it just becomes some extra dollars tied to the appraisal.  In the days when I started my career, performance awards were handed out in ceremonies in front of coworkers.  Now, in some organizations you just get your copy of the SF-50 with no fanfare – and sometimes you are given that SF-50 in the closet and sworn to secrecy in case anyone asks what you got.  We have come a long way, Baby, but I think we went the wrong way. [email protected]

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